Elvira Nabiullina failed to stop the decline of the ruble against the dollar and the euro
Photo Peter Kovalev / TASS
The central bank has no plans to sharply cut rates greater, as it can provoke an acceleration of inflation. This was said yesterday the head of the Central Bank, Elvira Nabiullina. She also said that inflation targeting is still one of the main tasks of the regulator, and the fracture of the negative trends in the economy may come in the second half of the year.
The Central Bank advised not to wait for a significant reduction in the key rate in the near future because of high inflation expectations and fear of a new destabilization of the currency market. “A more rapid decline in interest rates, which we sometimes call carries risks, as long as inflation expectations are high, and too rapid decline in interest rates in these conditions can lead to a new wave of destabilization in the foreign exchange market, the jump in inflation,” – said Nabiullina on Banking Congress in St. Petersburg. According to her, inflation expectations are now, though decreased in comparison with the maximum values remain above the permissible level. Recall that the key rate on December 16 was raised to 17%, in February it dropped to 15% in March – up 14% in the beginning of May – to 12.5%. According to the polls to Reuters, Central Bank on 15 June, may reduce the rate to 11.5% by the end of the year – up to 9,5%.
In the absence of significant new external shocks, inflation will continue to decline in line with forecasts of the Central Bank and the inflation target of 4% in the medium term remains, said the head of the Central Bank. “This outlook for inflation, and a decline in inflation expectations allows us to reduce the key rate. However, the rate of decline in key rates take into account the risks that we see in the coming months “, – she added.
Among the risks Nabiullina called the expected normalization of US monetary policy, the strengthening of the dollar, which will lead to an outflow of capital from emerging markets and the pressure on their currencies, including the ruble, the dynamics of oil prices.
In addition, the traditional factors are crop, food prices, and possible revision of the rate of growth of regulated prices and tariffs, the secondary effects associated with indexation.
«However, despite all these risks and proinflyatsionnye factors in recent months, we assess the risk of cooling the economy as higher, which gave us the opportunity to gradually reduce the key rate,” – she said. At the same time, the head of the Central Bank urged not to indulge in excessive optimism on what macroeconomic indicators this year were slightly better than initially very gloomy forecasts. “Current economic indicators were better than economists’ expectations, but premature to say that all the crisis passed, – Interfax quotes her. – Risks softened, but remained the same, and we should be aware of this ».
«To expect that exports will pull the economy is not necessary. Economy wipe 150-170 billion dollars. Per year compared to a conventional level, “- Nabiullina warned, noting that the Central Bank’s expectations, oil prices will be a half times lower than the average for the last five years. Factor limited access to capital markets, however, is now proved to be somewhat mitigated relatively soft schedule future payments.
Hints Nabiullina to the risks of currency volatility yesterday were confirmed stock information. The dollar shot up to 56 rubles, updating the maximum from 6 April. At the same time the ruble at the end of the day only to accelerate its fall. The euro, in turn, has risen to 63 rubles. Experts explain the fall of the ruble decline in oil prices, fears of an escalation of the conflict Ukrainian, as well as statements of the Nabiullina, which announced plans to buy up the currency in its reserves. During the period from May 25 ruble weakened against the dollar by 12%, while the euro – by almost 15%.
The central bank plans to increase its gold reserves to a level of 500 billion dollars. Formally, they are sufficient and now – at 22 May figure was 360.5 billion dollars., While according to international standards and Russian would be sufficient at least $ 200 billion. However, Russia effectively deprived of access to external capital markets, and, judging by the words of the head of the Central Bank, for a quick change of the situation is not particularly count. Therefore, the regulator sets the task to gradually build up reserves and to return them to their previous figure.
«gold reserves – this buffer. And, in our view, if the situation allows, it would be advisable to save up gold reserves. But we believe that the accumulation of reserves should be carried out gradually, only in a way that does not contradict the main goal of monetary policy – namely, the reduction of inflation to 4% in the medium term “, – said the head of the Central Bank. Thus, the controller still does not reject the idea of inflation targeting. According to Nabiullina, do not confuse the two types of interventions, which holds the Central Bank. The first relates to the accumulation of foreign exchange reserves. The second type – carrying out interventions in the event of a threat to financial stability. This artificial containment strengthening of the ruble as dangerous for the economy as artificial containment of weakening, she said.
According to Nabiullina, the financial system and the balance of payments is almost adapted to the new conditions, which can not be said about the economy in general. The head of the Central Bank expects to reverse the negative trends in the economy in the second half, and if “talking about an annual rate, in the next year».
«So, we come to what the result will depend on changes in external conditions, but to a greater extent on the pace of structural reforms,” - she believes. A positive scenario Nabiullina said that for which will change the sectoral structure of the economy towards a greater share of the manufacturing sector, the service sector with a significant increase in productivity. Negative same scenario would be if the stabilization of oil prices would “relax and the old structure of the economy with low productivity growth of 1-2% satisfied.” “Both scenarios are real,” – said the head of the Central Bank, adding that the regulator’s policy to reduce inflation and interest rates will have no effect without an improvement in the investment climate and support for entrepreneurs.
The respondents “NG” experts believe the intention of the Central Bank no longer sharply reduce the rate justified. “I think that the key rate has been reduced strongly enough compared to what it was. By the end of the year, it might fall by another percentage point. Difficult to predict – it will depend on many factors. I think that the decision of the Central Bank of course, all the more so a sharp decline in the key rate is still much impact on the market is not expected to. We have seen that even after the recent cuts key rate, which were significant enough credit market reacted with a considerable lag in time. A further reduction will obviously be gradual and will gradually lead to an improvement in the market “, – said the deputy chairman of the Asia-Pacific Bank Vyacheslav Andryushkin.
«If in the coming months, the Central Bank will aggressively cut rates, investment attractiveness of the ruble will lower its rate again begins to wane. If the process is released, the pair of “dollar-ruble” is easy to return to the level of 60. As a result, we have a couple of months back we get expensive imports and a new surge of inflation in the country. In this situation, the Central Bank must pursue a very cautious monetary policy, “not too far” – agrees chief analyst of “management savings” Alexander Potavin.
No comments:
Post a Comment